Institute Philosophy
Discover Broader Perspectives
At the Macro Institute, we believe shared knowledge from a higher vantage point can empower people and portfolios to reach their full potential.
What is Macro?
Macro analysis is the study of big-picture trends that influence markets and economies.
Monetary policy is ultimately the starting point of business cycle trends. The fed funds rate, which influences all other interest rates, is the common denominator in all U.S. expansions and slowdowns. History shows that it takes about 18 months for changes in the fed funds rate to be reflected in leading indicators, like equities. It takes another six months or so for these changes to be reflected in GDP growth.
There’s a maxim in the financial industry that says successful investors, like great hockey players, need to play not where the puck is, but where the puck is going. Since the equity market is a leading indicator of the economy, how do investors figure out the future path of stocks? Macro analysis is the starting point.
Follow the Clues
Forecasting the stock market requires finding series that anticipate leading indicators. That begins with studying what has been happening to interest rates over the past year and a half, or so. You can follow the impact of changes in rates through the various sectors of the economy, from housing to the consumer, and eventually financial markets.
A long holding period mitigates the impact of the business cycle on stock selection.
On average, only 32% of large-cap fund managers have beaten their benchmarks annually over the last decade. 
Why is Top-Down Analysis Important?
Industry Challenge
Simply put, today’s money managers are not well-versed in macroeconomic frameworks and principles. Macro forces account for nearly 75% of the changes in stock returns. However, investors mainly focus on company earnings while largely ignoring macro signals from the business cycle and yield curve. Due to this lack of understanding throughout the industry, firms and individuals have consistently missed opportunities to maximize returns and grow portfolios.
Learning Objectives
Successful M2SD candidates will gain an enhanced knowledge that connects the influence of macro forces to financial markets, stock selection, and portfolio design. This macro knowledge base will complement the candidate’s current understanding of fundamental equity analysis and improve their ability to forecast financial market trends. The ultimate goal for M2SD candidates is to implement these new lessons into their investment framework and have smarter conversations with clients.
Our Founder
François Trahan, currently the Chief Investment Strategist at BMO Capital Markets*, established The Macro Institute after a 25+ year career working at some of the most respected institutions on Wall Street.
François’s career was shaped by collaborations with leading minds in macroeconomics, including the great Ed Hyman. During the pre-subprime crisis housing warnings, his reputation soared as he offered prescient advice, including a call to stay invested.
His stellar track record throughout his career earned him a spot on the Institutional Investor All-America Research Team Hall of Fame.
François started The Macro Institute, with the goal of teaching investors the same macro knowledge and frameworks that built his career.
*Any reference to Mr. Trahan’s position at BMO Capital Markets are made solely for informational purposes. The Macro Institute is not affiliated, associated, or connected in any way with BMO Capital Markets Corp. or its affiliates (“BMO”) and BMO does not endorse or promote any of The Macro Institute’s statements, products, or services. The Macro Institute is solely responsible for its statements, products, and services.
Find out what M²SD has to offer
See how the M²SD program can make you a better investor. Download the course brochure to find out more.